The creation of a Just Transition Fund to help poorer EU regions move towards a climate-neutral economy cannot come at the expense of the bloc’s Cohesion Policy, the EU’s regional policy Commissioner has said.
“This is a regional issue and is something that will be using regional support,” Elisa Ferreira told a group of Brussels-based reporters on Thursday (9 January).
“But the new money has to come not at the expenses of Cohesion funds,” stressed the Portuguese economist and former vice-governor of the Bank of Portugal, who is now EU Commissioner for Cohesion and Reforms.
The European Commission is expected to unveil next week the details of the Just Transition Mechanism, an instrument which aims to assist regions that are most heavily affected by the green transition.
The new instrument is part of the European Green Deal and is considered key to convince coal-dependent countries like Poland, which face a bigger challenge at decarbonising their economy.
Poland is the only EU country that refused to sign up to the EU’s climate neutrality target at a summit in December, saying it needed more guarantees on funding before agreeing to Europe’s new 2050 objective.
In total, the Commission aims to mobilise around €100 billion under the new instrument, which will comprise a fund of around €30 billion.
The fund will be managed under Cohesion Policy rules and will draw resources from the EU’s long-term budget, which is still under negotiation, including the European Regional Development Fund and the European Social Fund Plus.
“It combines money that comes from the budget, with the involvement of the national programs that already have the capacity to address regional problems, and other instruments such as investEU and the European Investment Bank,” Ferreira explained.
The new fund will be supported by resources coming from the EU’s cohesion policy. But how much cash will be drawn from the EU’s regional budget is still unclear. In any case, the amount of additional funds, or “fresh money”, is unlikely to exceed €10 billion because countries like Germany and the Netherlands are reluctant to allocate further resources to the EU budget, EURACTIV understands.
Fear of cuts
Ferreira met on Thursday with members of the ‘Cohesion Alliance’, a group of organisations representing regional and local governments across Europe in defence of the main investment tool of the EU.
Regional leaders worry the Just Transition Fund will further reduce the envelope allocated to cohesion policy that was already cut by 7% in the EU’s long-term budget proposal for 2021-2027. Cohesion policy amounted to €351.8 billion in the current seven-year budget, the second biggest spending area after agriculture.
“The question is: where is the money? Where do you get the money? Is it from Cohesion Policy or within Cohesion Policy?” wondered Vasco Cordeiro, the President of the Conference of Peripheral Maritime Regions, who called for strengthening the instrument.
“We all agree with the goals, the objectives, but the question is about resources. They cannot contradict, they cannot put in jeopardy a key element of the European project that is Cohesion Policy,” he stressed.
Karl-Heinz Lambertz, the President of the European Committee of the Regions, agreed. “The main thing is to find the maximum resources. Let’s fight for the budget and then we will see what we can do after,” the Belgian politician said.
Environmental goals are already included in EU regional policy programmes. ‘A Greener, carbon-free Europe,’ is listed among the objectives of the new Cohesion Policy in the upcoming programming period for 2021-2027. But this does not include the Just Transition Fund.
“We need a new fund because we have a problem,” Ferreira said, referring to the “intensity” of the transition for carbon-intensive industries like coal and steelmaking.
Polish Prime Minister Mateusz Morawiecki insists that Poland should be allocated a “fair share” of the new fund, but French President Emmanuel Macron rushed to point out that access to financial assistance was conditional on Warsaw signing up to the EU’s climate objectives.
“The purpose of the Just Transition Fund is to help regions, wherever they are. Regions that suffer a very specific, a very strong, a very dramatic impact from having to make the production process compatible with our environmental targets,” Ferreira explained.
The Portuguese Commissioner did not go into details, saying only that the new fund will go primarily to the poorest EU regions with carbon-intensive industries.
One of the key question marks is the “conditionality” rules that will be attached to the fund. According to Lambertz, “there is a logical link between support for the transition and commitments to the objective” of climate neutrality. Otherwise, “it wouldn’t make any sense,” he said.
[Edited by Frédéric Simon]